Core Insights - The Russell 2000 index reached a record high of 2467.70, marking its first closing high since 2021, driven by expectations of lower interest rates following a Federal Reserve announcement of a quarter percentage-point cut and projections for two more cuts by year-end [2][7] Group 1: Small-Cap Performance - Small-cap stocks, defined as companies with market capitalizations between $250 million and $2 billion, have been anticipated to outperform due to lower interest rates, which typically lead to higher profits and reduced financing costs [3][6] - The iShares Russell 2000 ETF (IWM) has outperformed the iShares Russell 1000 ETF (IWB) over the past three months, with returns of 15% compared to approximately 10% for larger companies [5][7] Group 2: Valuations and Earnings Outlook - As of the end of August, small-cap stocks are projected to deliver annualized returns of 8% over the next decade, significantly higher than the less than 1% expected for large-cap stocks, according to a BofA Global Research report [6] - Analysts expect small-cap companies to grow earnings at a faster rate than their large-cap counterparts in the upcoming quarters, indicating a shift from previous trends [6][7]

Core Viewpoint - The iShares Russell 1000 ETF (IWB) is a large-cap blend ETF that offers broad exposure to the U.S. equity market, with significant assets under management and a focus on large-cap companies [1][2]. Group 1: Fund Overview - The iShares Russell 1000 ETF was launched on May 15, 2000, and is sponsored by Blackrock, with assets exceeding $41.49 billion [1]. - The fund targets large-cap companies, defined as those with market capitalizations above $10 billion, which are generally more stable and less volatile [2]. Group 2: Costs and Performance - The ETF has an annual operating expense of 0.15%, making it one of the more cost-effective options in its category, and it offers a 12-month trailing dividend yield of 1.09% [3]. - As of July 21, 2025, the ETF has gained approximately 7.66% year-to-date and 15.31% over the past year, with a trading range between $272.36 and $345.22 in the last 52 weeks [7]. Group 3: Sector Exposure and Holdings - The ETF has a significant allocation to the Information Technology sector, comprising about 32.30% of the portfolio, followed by Financials and Consumer Discretionary [4]. - Microsoft Corp (MSFT) is the largest holding at approximately 6.34% of total assets, with the top 10 holdings accounting for about 32.79% of total assets under management [5]. Group 4: Risk and Alternatives - The ETF aims to match the performance of the Russell 1000 Index, which includes the largest issuers in the U.S. equity market, and has a beta of 1.01, indicating medium risk [6][7]. - Alternatives to IWB include the SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO), which have larger asset bases and lower expense ratios [9]. Group 5: Investment Appeal - The iShares Russell 1000 ETF is rated as a "Buy" by Zacks based on expected returns, expense ratio, and momentum, making it an attractive option for investors seeking exposure to large-cap blend stocks [8]. - The growing trend towards passively managed ETFs highlights their advantages in cost, transparency, flexibility, and tax efficiency, appealing to both retail and institutional investors [10].